Pandora caps mobile listening hours to counter 'rising royalty rates'

Pandora is to cap mobile listening hours at 40 per month for US users to address rising content costs relating to its listeners' use on the move.

Speaking in a blog post, Pandora founder Tim Westergren explains Pandora's per-track royalty rates "have increased more than 25% over the last three years, including 9% in 2013 alone and are scheduled to increase an additional 16% over the next two years."

He says the new measure “allows us to manage these escalating costs with minimal listener disruption.” The limit is said to be temporary, but no time span has been reported.

Listeners will either be able to listen for free on computers, pay 99 cents for extended listening once the cap is reached (through in-app purchases) or subscribe to Pandora One, the company's ad-free product that costs $3.99 per month.

It’s not the first time the internet radio site has introduced listening limits, back in 2009, listening was capped at 40 hours per month and users who surpassed that limit could buy unlimited hours for 99 cents. That ended in September 2011 and CEO Joe Kennedy says it "proved to be a smart lever to impact royalty costs."

Only 4% of its monthly active users, which stood at 65.6 million in January, will be affected by the new rule. The average Pandora listener uses the service for 20 hours per month across all devices.